Good Works

A new documentary and two new books examine the soul of the modern corporation.

Pity the poor corporation. If you just went by the news you heard last month, you’d say it’s an institution led by crooks (see Martha Stewart, sentenced to five months in prison and five months of house arrest, and Adelphia’s John and Timothy Rigas, convicted of fraud and conspiracy). You’d think that handcuffs, not cuff links, are appropriate corporate attire (see Kenneth Lay, doing the now-familiar perp walk). You’d think a corporation is a place where women are routinely discriminated against and harassed (see Morgan Stanley’s $54 million settlement of claims brought by women who said the firm froze them out of promotions and raises), and where business-development meetings are held at strip clubs.

Finally, big business has achieved star status--of the Fahrenheit 9/11 variety--with the release of a new documentary. The Corporation applies the DSM-IV, a standard diagnostic tool for mental-health professionals, and finds that the corporate "person" on the couch "fully meets the diagnostic criteria of a ‘psychopath,’ " according to the three filmmakers. (Both Michael Moore and Peter Drucker are among the other non-clinicians commenting on the behavior of corporations in this film, so you can factor that into your decision on whether or not to see it.)

Now just imagine that employees have these visions of the corporation in mind as they lie in bed on Monday morning. They mull over whether they’re headed to work for the kind of institution that is led by greedy criminals, that discriminates against people on the basis of gender, that is as deranged as a serial killer. You can see why morale problems are rampant in so many companies.

Good news always gets less attention than bad news, and so at the risk of sounding a little like Pollyanna, I’ll direct your attention to two new books that are an antidote to the notion that big business is always rapacious and focused on the bottom line to the exclusion of all other factors. The first is Profits with Principles: Seven Strategies for Delivering Value with Values, by Ira A. Jackson and Jane Nelson. The second, to be published in October, is Faith and Fortune: The Quiet Revolution That Is Transforming Corporate America, by Marc Gunther.

Although the books approach their subject matter very differently, both are full of anecdotes about companies with a conscience. They thrive not by cynically grafting do-good projects and PR onto an unprincipled organization but by making their values the centerpiece of what they do. A few, like Tom’s of Maine or Greyston Bakery, are small and consider themselves to be doing "God’s work," as Gunther puts it in Faith and Fortune. But most of the companies discussed in the books are very large and fully embrace the profit motive: Timberland, UPS, Citigroup, Alcoa and Herman Miller, to name just a few. Each is working under guiding principles beyond making as much money as possible.

As Jackson and Nelson say in the title of one of their chapters, "Capitalism rules…but needs new rules." These companies have put those rules into practice, mastering what Jackson and Nelson call "the art of ‘and.’ " Their leaders recognize the need for financial performance and social, ethical and environmental performance. They are accountable to shareholders and stakeholders--employees, customers and the larger community. Feel free to cite these companies when someone tars all businesses with the Enron, WorldCom or HealthSouth brush.

What struck me about both books is that successful companies know they won’t be successful if they’re not places that instill pride and devotion in their employees.

Marc Gunther writes: "When I ask executives why they won’t cut corners when it comes to the quality of their products even if consumers wouldn’t notice the difference, or why their environmental programs go well beyond compliance, or why they want to help alleviate poverty in their community, the answer is almost always the same: ‘Our people have high expectations of the company.’ "

In the long run, almost no one wants to work for a serial killer, no matter how much they’re getting paid for doing the dirty work.